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Generation Y travelers’ hotel consideration: the impact of travel

mode and reference room price

Bachelor Thesis for Obtaining the Degree

Bachelor of Business Administration in

Tourism, Hotel Management and Operations

Submitted to Daniel Leung

Louisa von Oertzen

1311047

Vienna, 26th May 2017

2

Affidavit

I hereby affirm that this Bachelor’s Thesis represents my own written work and that I

have used no sources and aids other than those indicated. All passages quoted from

publications or paraphrased from these sources are properly cited and attributed.

The thesis was not submitted in the same or in a substantially similar version, not

even partially, to another examination board and was not published elsewhere.

26.05.2017

Date Signature

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Abstract

Generation Y has become one of the largest consumption groups in the tourism

industry. While the body of literature on Generation Y has been increasing, no

available study attempts to explore factors affecting Generation Y travelers’ hotel

consideration or selection. The objective of this thesis is to investigate Generation Y

travelers’ hotel consideration under different travel modes and reference room

price levels.

A survey experiment testing six different scenarios for hotel consideration of a hotel

in Australia was conducted. 132 valid responses (68% female) of Generation Y

traveler’s were received. The data was analyzed using the 2- way analysis of variance

(ANOVA) method. The research findings showed that reference room price and

travel mode are highly significant factors influencing hotel consideration, but no

interactive impact between these factors was evident.

This study has shown that reference room price and travel mode influence

Generation Y’s hotel consideration independently. Given the limited sample size of

this study, but the highly significant result, a further study with a larger sample size

would be needed to generalize the results.

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Table of Contents

List of Figures 8

List of Abbreviations 9

1 Introduction 10

2 Literature Review 13 2.1 Generation Y 13

2.1.1 Definition 13

2.1.2 Characteristics 14

2.2 Behavioral differences between Generation Y and other generations 15

2.2.1 Decision making process 16

2.2.2 Technology, Internet and Social Media use 18

2.2.3 What we don’t know about Generation Y 20

2.3 Factors Influencing Hotel Consumers’ Consideration 21

2.3.1 Travel Mode 21

2.3.2 Travel Party Size 22

2.3.3 Holiday Type 22

2.3.4 Price of Journey/ Accommodation/ Ease of Booking 23

3 Research Methodology 24 3.1 Research Stimuli 24

3.2 Experimental Design 25

3.3 Data Collection 26

3.4 Data Analysis 27

4 Research findings 28 4.1 Demographic profile 28

4.1.1 Gender 28

4.1.2 Nationality 28

4.1.3 Frequency of booking a hotel online 29

4.1.4 Frequency of reading reviews online 30

4.2 Likeliness 30

4.2.1 Likeliness of booking the hotel after reading the scenario, hotel profile

and the reviews 30

5

4.2.2 Likeliness of booking the hotel via Trip Advisor after reading the

scenario, hotel profile and the reviews 31

4.2.3 Likeliness of booking the hotel via a different booking platform after

reading the scenario, hotel profile and the reviews 33

4.2.4 Likeliness to stay (after reading the hotel scenario) vs. likeliness to stay

(after reading the reviews) 34

4.3 Price 35

4.3.1 Price after reading the scenario 35

4.3.2 Price after reading the hotel profile 37

4.3.3 Price (after reading the scenario) vs. price (after reading the hotel

profile) 38

4.3.4 Price (after reading the hotel profile) vs. price (after reading the

reviews) 39

4.3.5 Price (after reading the scenario) vs. price (after reading the reviews)

40

4.4 Number of Reviews 42

5 Conclusion 44 5.1 Summary 44

5.2 Limitations 45

5.3 Recommendations 46

6 Bibliography 48

7 Appendices 51 Appendix 1 51

Appendix 2 51

Appendix 3 51

Appendix 4 52

Appendix 5 53

Appendix 6 54

Appendix 7 55

Appendix 8 56

Appendix 9 57

Appendix 11 57

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List of Tables

Table 1: Global generation overview (Ordun, 2015, p. 41). 13

Table 2: Decisional patterns of Generation Y compared with Baby Boomers (Parment, 2013 as cited in Ordun, 2015, p. 44). 17

Table 3: Type of accommodation- European outbound travel (IPK International, 2016). 21

Table 4: Types of holiday of Generation Y in Australia (Kattiyapornpong, 2009, p. 4). 23

Table 5: Pilot survey results of 20 Generation Y members. 24

Table 6: Gender of survey participants. 28

Table 7: Nationality of valid survey respondents. 28

Table 8: The frequency of valid survey respondents booking a hotel online. 29

Table 9: The frequency of survey respondents reading reviews online. 30

Table 10: Likeliness of booking the hotel after reading the scenario, hotel profile and the reviews. 30

Table 11: Descriptive statistics for the likeliness of booking the hotel after reading the scenario, hotel profile and the reviews. 31

Table 12: Likeliness of the survey participants booking the hotel via Trip Advisor after reading the scenario, hotel profile and the reviews. 31

Table 13: Descriptive statistics for the likeliness of the survey participants booking the hotel via Trip Advisor after reading the scenario, hotel profile and the reviews. 32

Table 14: Likeliness of survey participants booking the hotel via another platform after reading the scenario, hotel profile and the reviews. 33

Table 15: Descriptive statistics of the likeliness of survey participants booking the hotel via a different platform after reading the scenario, hotel profile and reviews. 33

Table 16: Paired sample statics of the likeliness to stay (after reading the scenario) vs. the likeliness to stay (after reading the reviews). 34

Table 17: Paired samples test of the likeliness to stay (after reading the scenario) vs. the likeliness to stay (after reading the reviews). 35

Table 18: Price the survey participants would pay per night per room after reading the scenario. 36

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Table 19: Descriptive statistics of the price the survey participants would pay per night per room after reading the scenario. 36

Table 20: Price the survey participants would pay per night per room after reading the hotel profile. 37

Table 21: Descriptive statistics for the price the survey participants would pay per night per room after reading the hotel profile. 38

Table 22: Paired samples statistics for the price (after reading the scenario) vs. the price (after reading the hotel profile). 38

Table 23: Paired samples test for the price (after reading the scenario) vs. the price (after reading the hotel profile). 39

Table 24: Paired sample statistics for the price (after reading the hotel profile) vs. the price (after reading the reviews). 39

Table 25: Paired samples test for the price (after reading the hotel profile) vs. the price (after reading the reviews). 40

Table 26: Paired sample statics for the price (After reading the scenario) vs. the price (after reading the reviews). 41

Table 27: Paired samples test for the price (after reading the scenario) vs. the price (after reading the reviews). 41

Table 28: The number of reviews read per participant. 42

Table 29: Descriptive statistics of the number of reviews read per participant. 42

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List of Figures

Figure 1: Antecedents and consequences of social media use by Generation Y (Bolton et al., 2013). 19

9

List of Abbreviations

OTA- Online Travel Agency

ICT- Information and Communication Technologies

GDS- Global Distribution Systems

OIS- Organizational Information Systems

ANOVA- Analysis of variance

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1 Introduction

As defined by the Business Dictionary (2016), Generation Y are those born in the

1980s and early 1990s. Also known as “Generation Next”, “Echo Boomers”, “Chief

Friendship Officers” or “24/7’s”, this group of people is named as Generation Y, since

they are the descendants of Generation X (West Midland Family Center, n.d., p. 1).

Ordun (2015) believes that generation Y will soon become the new generation which

the world will focus around. A reason for this is that Generation Y has great pleasure

in spending money. Due to this, it is of particular importance that great effort is put

into analyzing this generation and optimizing particular industries to meet the needs

of the “soon-to-be leaders”. According to IPK International (2016) Generation Y

consists of around 1.8 billion people. In the United Kingdom for example, Generation

Y consists of 13.8 million people (The Guardian, 2017). They grew up in a digitalized

world, which focused around them, however alongside many negative events such

as school shootings and terrorist attacks like 9/11. All these influences have shaped

this generation to be who they are today.

With Generation Y being three times as large as the previous Generation X, they are

the largest consumption group since the Baby Boomers (Ordun, 2015). In order to

understand the effects this generation is having, and will have on the economy in

the future, it is helpful to have a look at some statistics. In 2013 the purchasing

power of Generation Y was already estimated to be US$170 billion per year

(Honigman, 2013). Schwabel (2015) states that one fourth of the entire American

population is made up of Millennials, which have US$200 billion in yearly purchasing

power. According to the World Tourism Organization (2016, p. 12), in the United

Kingdom, “international students are estimated to generate around GBP 17.5 billion

for the UK economy, and support almost 22,000 full time equivalent jobs outside

higher education”. Therefore it is not only important to have a look at the economy

of individual countries but at the economy as a whole, as Generation Y are having an

increasingly large impact on consumption and spending patterns.

As stated by Benckendorff, Moscardo and Pendergast (2010, p.1), “a major shift in

the balance of generational dominance is currently occurring, with the ‘Baby

Boomer’ generation exiting the leadership roles in the workforce and the Y

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Generation dramatically, entering, both in the workforce and as visitors”. According

to Weberskirch (as cited in IPK International, 2016), 150 million outbound trips were

taken by Generation Y in 2015, which represents one third of the outbound trips

taken by Europeans. With the number of Generation Y travelers steadily increasing,

the amount of trips taken by this generation in the future will also increase.

Generation Y characteristics range from outgoing, flexible and optimistic to

demanding (Kattiyapornpong, 2009), ambitious and hard to please (West Midland

Family Center, n.d.). Therefore, concerning travelling and hotel visits “Gen Y can be

notoriously difficult to attract, retain, motivate, and develop” (Dorsey, 2010). This

generation consists of achievers who largely communicate through technological

devices. They like to be given feedback, and find it natural to ask for it. Although

balance is extremely important to Generation Y, they are occasionally willing to give

it up. To the elders of this generation, family is extremely important (West Midland

Family Center, n.d.).

Given that the characteristics of Generation Y are not identical to previous

generations, knowledge and insights from previous studies which are mostly derived

from responses by Generation X and Baby Boomers may not generalize to

Generation Y. Due to this reason, as well as the prominent growth of Generation Y

consumers in both size and impact, academic researchers have started paying larger

attention to Generation Y. In Google scholar, the number of ‘Generation Y’ related

studies is as high as 48,400. Various issues have been examined including, but not

limited to “Generation Y: Thriving and surviving with generation Y at work”

(Sheahan, 2005), “Cause-related marketing: How Generation Y responds” (Cui, Trent,

Sullivan & Matiru, 2003) and “What students want: Generation Y and the changing

function of the academic library” (Gardner & Eng, 2005). In the tourism and

hospitality context, a number of studies about Generation Y travelers’ behavior have

also been conducted. For instance, the article written by Solnet and Hood (2008)

examines the effect which the new generation of employees has on the working

environment, as well as the changes in management paradigms needed to recruit,

select, train and motivate Generation Y. The case study of Australian four- and five-

star hotels by Davidson, Timo and Wang (2010) investigates how much labor

turnover costs. Richardson (2010) examines the attitudes and perceptions of

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undergraduate tourism and hospitality students in Australia towards careers in the

tourism and hospitality industry. Although much effort has been conducted, to the

best of the author’s knowledge, Generation Y travelers’ hotel selection behavior has

not been explored. Particularly, the determinants affecting Generation Y travelers’

hotel consideration have not been investigated in prior studies.

As Generation Y will be one of the biggest consumer segments in the future (New

York Times, 2016), this study aims (1) to examine the impact of travel mode on

Generation Y travelers’ hotel consideration and (2) to examine the impact of

reference room price on Generation Y travelers hotel consideration. These two

determinants (i.e., travel mode and reference room price) are highlighted since their

influence on travelers has been acknowledged in multiple studies (e.g. Song & Li,

2008; Marcussen, 2011).

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2 Literature Review

2.1 Generation Y

2.1.1 Definition

Recently, vast amounts of research and discussions have been published concerning

Generation Y. As stated previously, Generation Y are those born in the 1980s and

early 1990s (Business Dictionary, 2016) but there is no consensus agreement on the

exact beginning and end of this generation (Brosdahl & Carpenter, 2011 cited in

Bolton, 2013).

Table 1 exhibits an overview of global generations, which is developed by Ordun

(2015). As shown in Table 1, Generation Y is perceived differently depending on the

country. Generation Y in India and the Czech Republic for example, is defined as

those born in 1980 until now, whereas Generation X and Generation Y are not

separated in South Korea and are born between 1970 and now. As there is no clear

definition for Generation Y, it is difficult to report how many members of this

generation there are. To avoid confusion in this thesis, Generation Y is defined as

those born between 1979 and 1995, as defined by Kattiyapornpong (2009).

Table 1: Global generation overview (Ordun, 2015, p. 41).

Country Defined age range of generation Y

Defined age range of generation X

Defined age range of Baby Boomers

V

a

l

i

d

India 1980- Now

South Korea 1970- Now 1970- Now

Russia 1985- now 1965-1985 1945-1965

Czech Republic 1980- Now 1965-1980 1945-1965

South Africa 1990- now 1970-1990 1945-1970

Brazil 1980- Now 1965-1980 1945-1965

United States 1981- 2000 1965-1980 1946-1964

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2.1.2 Characteristics

The characteristics of Generation Y range from being optimistic yet demanding, to

being able to apprehend technology on another level when compared to previous

generations (Kattiyapornpong, 2009). Due to this, Generation Y is also nicknamed as

the ‘Digital Natives’. New behavioral attitudes are emerging as this generation has

grown up into a world of digitalization with ever increasing dimensions of

communication and socialization via technology (Huber and Rauch, 2013). Although

there is not a lot of literature on the behavior of Generation Y concerning online

booking behavior, there are vast amounts of literature discussing characteristics of

this generation group. Generation Y’s characteristics have not only been shaped by

the extensive technological developments, but also by events such as 9/11, a general

increase in terror attacks, refugee problems in 2015 (Zeit Online, 2015) and the

economic recession in 2009. A general attitude pattern can be seen when it comes

to Generation Y. They are extremely demanding and “[…] they ‘want it all’ and they

‘want it now’” (Bolton, Parasuraman, Hoefnagels, Migchels, Kabadayi, Gruber,

Komorova Loureiro, Solnet, 2013, p. 247). This is perhaps due to witnessing some of

the above events. Generation Y lives more by the moment, which could also be a

reason why they are more interested and keen to receive a good education in

comparison to previous generations. Dealing with money is of importance to this

generation as they “earn to spend” (West Midland Family Center, n.d., p. 4).

Open-mindedness is only one of the positive attributes Generation Y has developed.

For example, there are less harsh attitudes towards homosexual marriages in more

developed countries. Religion and freedom of belief are important aspects this

generation is confronted with. Concerning transparency, Generation Y is also very

demanding. They are expecting responsibility and like to actively take part in

decision- making (Huber & Rauch, 2013). This open-minded attitude enhances the

social life of this generation. Ordun (2015, p. 40) describes Generation Y to be “[…]

innovative, energetic, ambitious, confident, motivated and smart”. Therefore some

of the core values of this generation are achievement, diversity, high tolerance,

competitiveness and self-confidence (West Midland Family Center, n.d.). Generation

Y was brought up in a protected way. As a result of this, they will always be more

attached to their parents than other generations.

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When it comes to work, Generation Y like to receive individual responsibility,

through which they can be innovative and creative. Although they are group

oriented, they like to be innovative and are open to new ideas. However most

importantly they strive to receive appraisal by friends, family and at their work

place. They are affective at fulfilling their job, however stick to the exact working

times and do not like to work extra hours. Due to technology they have developed

an attitude of working flexibly, anytime and anywhere. They believe that the work

itself is what counts, and not how, where or when they complete it. Although long-

term relationships concerning customer loyalty are not important to Generation Y as

customers, they wish to achieve long- term relationships with their employers,

however, under their own conditions. Being able to experience a career makes this

generation feel very privileged, and grants them stability concerning their goal-

oriented personality. As mentoring is of great importance to Generation Y, they may

be the first generation to accept older leadership, and view this as an inspiration

(West Midland Family Center, n.d.).

But, Generation Y also has some negative characteristics. They are described as “[…]

lazy, irresponsible, impatient, apathetic, selfish, disrespectful and even lost” (Ordun,

2015, p. 40). The fact that Generation Y workers are very punctual concerning the

time they like to work, may lead older generations to judge them as being lazy,

selfish and disrespectful. By growing up alongside everything happening ‘at the click

of a button’, Generation Y may be more impatient than other generations.

2.2 Behavioral differences between Generation Y and other

generations

Looking at the previously mentioned global generation overview, it is evident that

four main generational groups exist according to the United States’ generation

definition. The first generation group is not listed on the table, however according to

Ordun (2015), they were born between 1920 and 1945 and are named ‘Builders’.

‘Baby Boomers’ born between 1946 and 1964, ‘Generation X’ born between 1965

and 1980 and ‘Generation Y’ born between 1981 and 2000 are the other three

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generational groups. The characteristics of these generation groups are shaped by

social, political and economic influences during their teen-age years. As Jackson et

al. (2011, as cited in Ordun, 2015, p. 41) stated, “These values, beliefs, expectations

and behaviors remain constant throughout a generation’s lifetime”.

Humme (2010, as cited in Ordun, 2015, p. 40) states that “different generations and

demographic consumer groups are exposed to: (a) different social and economic

opportunities and barriers, (b) different types of technology activities, (c) different

social perceptions and different community norms, and (d) different life experiences

and events”. Due to these inherent differences it is comprehensible that the

behavioral patterns and preferences vary across different generations.

Although described as the Sandwich Generation, Baby Boomers are described as

individualistic, competitive, yet have a strong interest in self-fulfillment through

personal growth. They grew up during a time of political and social conversion,

witnessing the Civil Rights Movement for example (Ordun, 2015). Economic security

was created by this generation through their active involvement at work, leading to

great career achievements (Jackson, Stoel et al., 2011 as cited in Ordun, 2015).

According to Jorgensen (2003, as cited in Ordun, 2015) Baby Boomers favor team

work and enjoy group debates, are rather process oriented when working, value

company commitment and loyalty and live by the rule of first having to sacrifice

something in order to be successful afterwards. Due to this, they search for long-

term employment.

2.2.1 Decision making process

The decision- making patterns of Generation Y in comparison with those of Baby

Boomers are listed in Table 2. It states that Generation Y choses their products on an

emotional base whereas Baby Boomers tend to make more rational decisions.

Generation Y is rarely loyal as they always look for the most innovative products

based on feedback received from not only their friends, but well- known influential

people. Baby Boomers on the other hand, are more loyal and their purchasing

activity may only be influenced by experts and close friends (Parment, 2013 as cited

in Ordun 2015).

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Table 2: Decisional patterns of Generation Y compared with Baby Boomers (Parment, 2013 as cited in Ordun, 2015, p. 44).

Generation Y Baby Boomers

Many market opportunities

An opportunity and source of inspiration

Somewhat frustrating

Large supply of information

Know how to navigate Stressful, takes time to deal with

Purchase criteria emphasis

Emotional Rational

Main risks Social risks Physical and financial risks

Choice of product Emotional Rational

Choice of retailer Rational Emotional

Retailer loyalty Low High

Attractive products

Innovative, early adoption Mature, late adoption

Social influence on purchase decisions

High Limited

Source of social influence

Well- know and influential people, friends

Experts and close friends

Main role of the brand

Image, social profiling and quality

Quality

In comparison to previous generations like the Baby Boomers, Ordun (2015, p. 41)

states that “Generation X is one of the most highly educated generations”. They are

said to value autonomy and independence, thrive to open communication, and are

rather action oriented when compared to the Baby Boomer generation. They seek to

gain know how and competences needed for a particular job, but are not interested

in a long-term engagement at work. They are reluctant to take on leadership roles,

and believe in balancing their work and personal lives.

Through the analysis of these three generations, certain comparisons can be made.

In the past, generations were mainly oriented around becoming prosperous and

providing a comfortable life for their family. Generation Y on the other hand, is

taking much longer in getting married for example, and due to this, 75% of

Generation Y is still single. On top of this, technology and the Internet have made it

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possible that this generation can gain access to information without having to ask

someone for permission. This results in a more educated generation (Ordun, 2015).

Having a work life balance and being independent is not something that has

developed with this generation, but previous generations have also been striving to

achieve this. As mentioned before, each generation’s characteristics are shaped by

the way they are brought up and the events they witness. Due to this, of course,

characteristics can be compared, however the reasoning behind these

characteristics cannot be compared, only analyzed.

2.2.2 Technology, Internet and Social Media use

Contributing, sharing, searching for and consuming content via the internet using

recently developed technology is part of a Generation Y’s day to day life (Bolton et

al., 2013). The study conducted by Kattiyapornpong (2009) in Australia shows, that

while only 24% of all Generation Y read heavy (7+ times in the last week) online

newspapers, 41% view commercial TV between 2 hours to 4 hours per day. However

these are not the only type of activities Generation Y participates in using

technology. The study also shows that 21.3% of Generation Y’s use the Internet to

book a short trip, while only 13.6% of the generations older than Generation Y book

via the Internet. This shows that while older generations also participate in media

usage, they participate less than Generation Y. Therefore, as stated in Bolton et al.

(2013, p. 249) “Generation Y uses social media for the same purposes as other

groups: for information, leisure or entertainment […].”

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Figure 1: Antecedents and consequences of social media use by Generation Y (Bolton et al., 2013, p. 249).

Although social media use is of great importance to Generation Y, it is obvious that

the use of social media by Generation Y varies depending on the country, and on

cultural and technological differences. Bolton et al. (2013, p. 246) also states that

“Generation Y’s social media use affects consumers’ identity formation, their

expectations regarding service, formation of habits, engagement with brands and

firms, participation value co- creation, brand loyalty, purchase behavior and lifetime

value, and (ultimately) the value of the firm”. Environmental factors (cultural,

economic and political factors) influence this generation in a direct and in an indirect

way. Individual factors like personal values and preferences of use as well as age are

affected by these environmental factors, and thereby shape the online presence of

Generation Y.

Disposable income, employment chances and consumer confidence are all factors

that can be influenced by economic factors and thereby have an effect on the use of

social media in a particular country. The way, in which Generation Y has grown up,

reflects their use of social media, creating a ‘digital divide’ (Castells et al., 2004 as

cited in Bolton et al., 2013, p. 250), which “[…] largely mirrors inequalities on the

basis of education, income, occupation, social class and neighborhood” (Zhao et al.,

2008 as cited in Bolton et al., 2013, p. 250). In certain countries, Generation Y

members have fewer privileges. With the percentage of Generation Y being able to

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afford services such as the Internet (which allows the use of social media) being a lot

lower than in more developed countries, this so-called ‘digital divide’ can clearly be

seen. In South Africa for example, the majority of citizens own mobile phones and

are therefore able to access the Internet (even in urban areas) nevertheless 23% do

not have the luxury of owning a mobile device. Due to this, they must find other

ways to access the Internet such as a shared ownership of a device or paying per

use, if they wish to have a social media account (Donner, 2008; Kreutzer, 2009 as

cited in Bolton et al., 2013).

Social inclusion and belonging to a particular peer group are vital factors, which this

generation aims to achieve, many with the help of social media (Huber & Rauch,

2013). When comparing the generations, 75% of Generation Y has created and/or

owns a social media account while only 50% of Generation X and 30% of Baby

Boomers are familiar with social media (Ordun, 2015).

2.2.3 What we don’t know about Generation Y

There is a lot left to learn about Generation Y, perhaps through future research. It is

still somewhat unclear what influences certain types of social media usage (shown in

Figure 1), if there are differences between subgroups of Generation Y and whether

they influence individual social media use. Due to this, it is difficult to compare

Generation Y’s behavior with previous generation groups (Bolton et al., 2013). As

Generation Y has only reached the beginning of their 30’s, it is not possible to

compare them to other generations concerning pension predictions, retirement and

general behavior that comes with ageing. Predictions concerning family, the average

amount of children Generation Y has and so on are also only partly correct. This is

due to the fact that most of Generation Y is only just reaching the age where they

start thinking about creating a family. Finally, information concerning online

behavior and behavior connected to the use of social media is also difficult to

evaluate as not a lot of research is existent at this point in time. Nevertheless, as this

generation is currently becoming the most important generation, the amount of

research done concerning behavior, will increase rapidly during the next few years

(Ordun, 2015).

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2.3 Factors Influencing Hotel Consumers’ Consideration

When travelling, travelers can be influenced by many different factors. Especially

when it comes to the hotel selection, it is difficult to meet everyone’s needs.

Nevertheless, marketers analyze the individual generation groups in order to get a

better picture of what they look for when booking a flight, hotel or holiday in

general (Kattiyapornpong, 2006). Older generations were segmented by factors such

as age however, when looking at Generation Y, this is not enough. Although there

have been some studies concerning the online purchasing behavior of Generation Y,

“The characteristics and travel attitudes and behavior of Generation Y tourists are

not specifically addressed” (Kattiyapornpong, 2009, p. 2).

2.3.1 Travel Mode

When travelling, the travel mode can have an impact on hotel selection and holiday

planning. If someone is travelling alone, they may either be more cautious when

planning a journey and reserving the accommodation, or they will be less demanding

when it comes to the hotel selection and the journey taken to get to their final

destination. Mostly, they will travel using their own budget, and can entirely focus

on themselves.

Concerning booking behavior of Generation Y in general, Table 3 shows that the

majority of European Generation Y travellers like to stay at 3-4 star hotels. 9% of

both European Generation Y and other Europeans stay at five star hotels and only

3% stay at 1-2 star hotels. Generation Y travellers do not differentiate themselves

from other generations when it comes to travel patterns (which can also be seen on

Table 3). “The main difference was in spending with European Millennials [=

Generation Y] spending less on outbound travel than older travellers. However, as

the younger generation, this would be expected due to their lower income levels”

(Weberskirch as cited in IPK International, 2016, p. 26).

Table 3: Type of accommodation- European outbound travel (IPK International, 2016).

Generation Y (in Europe) Total Europe

Hotel 54% 57%

5 * Hotel 9% 9%

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4 * Hotel 23% 26%

3 * Hotel 19% 19%

1-2 * Hotel 3% 3%

Other Accommodation paid for 26% 24%

Other Accommodation not paid for 18% 16%

Others 2% 2%

2.3.2 Travel Party Size

When travelling as a group and deciding on the accommodation, there are more

factors, which have to be taken into account since more parties are involved. The

more travelers the group consists of, the more needs and wants have to be satisfied

during the hotel selection process. Of course, if the travelers are of the same age

group or same generation, many similarities can be found. However, “Being within

the same age group does not mean that they are homogenous who have the same

preferences” (Kattiyapornpong, 2009, p. 2). While travelling in small groups has

always been popular, not only an increase of group travels has been reported, but

also an increase in the size of groups. Groups consisting of around ten people, often

including a tour guide have increased by 9%. However, when it comes to the group

bookings made online, this will always prove to be a challenge concerning planning

and payments. When looking at how bookings are made in general, it can be seen

that booking via a desktop computer is still the leading channel. Although mobiles

are used to search for holidays, out of the 65% of people doing this, only 20% book

via mobile (Student Universe, 2017).

2.3.3 Holiday Type

When referring to Table 4, it is evident that 38.3% of Generation Y prefer to take a

short break to escape the grind when compared to taking a family holiday for

example, which only 9.7% of Generation Y prefer doing. When comparing

Generation Y to older generations, not so much of a difference can be seen.

Nevertheless, the generations do differentiate when it comes to taking part in a

holiday in a vibrant, stylish, cosmopolitan place. 9.3% of Generation Y would take

part in such a holiday, however only 4.3% of the older generations would. A reason

for this could be that Generation Y is keen to experience as much as possible,

whereas older generations prefer to travel to more peaceful, remote destinations.

23

Also, according to Student Universe (2017), “[…] students are generally more

resilient in the face of terror attacks, political uncertainty and health scares (such as

Zika)”.

Table 4: Types of holiday of Generation Y in Australia (Kattiyapornpong, 2009, p. 4).

Holiday Type Generation Y Older than Generation Y

Vibrant, Stylish, Cosmopolitan holiday

9.5% 4.3%

Road-trip: exploring things at ones own pace

12.0% 14.0%

Family Holiday 9.7% 11.8%

Active Holiday 5.1% 2.2%

Outdoor Activity Holiday 9.5% 8.5%

Short break to escape the grind 38.3% 33.7%

2.3.4 Price of Journey/ Accommodation/ Ease of Booking

Money plays a huge role in the life of Generation Y. When booking a holiday or

journey to go somewhere, a fundamental criteria for booking is the price, for 90%

younger Generation Y members. Enforcing simple economy flights without seat

selection, cancellation policies and overall reduced services, such as United and

American Airlines have done, was a great solution to target low- budget travelers,

meaning Generation Y, to travel for less. However, booking flights with stopovers

can also decrease spending. 65% of younger Generation Y members would use this

technique to reduce their spending, even though it would make their journey less

convenient and comfortable. Nevertheless, when it comes to booking a holiday via

OTAs, Generation Y need convenience. For this generation it is extremely important

to be able to book flights, a hotel and everything else needed for their holiday in one

go, ideally using the same website. This is why more and more online websites are

beginning to not only offer flights or hotels, but a mix of both. (Student Universe,

2017).

24

3 Research Methodology

In order to find out whether travel mode and reference room price have any

influence on Generation Y travelers’ hotel consideration, an online survey with

different sections was conducted.

3.1 Research Stimuli

In order to picture the situation more clearly, six scenarios were created:

- Scenario 1: the participant is travelling alone and received high reference price

level information concerning the hotel room price per night.

- Scenario 2: the participant is travelling alone and received medium reference

price level information concerning the hotel room price per night.

- Scenario 3: the participant is travelling alone and received low reference price

level information concerning the hotel room price per night.

- Scenario 4: the participant is travelling with a friend and received high reference


- Scenario 5: the participant is travelling with a friend and received medium

reference price level information concerning the hotel room price per night.

- Scenario 6: the participant is travelling with a friend and received low reference


The three price levels are determined based on the results of a pilot survey with 20

members of Generation Y. In brief, the respondents were given the scenario:

‘Imagine you are planning to take a trip to Adelaide (Australia) to celebrate Easter in

the coming April 2017, and were to book a room in an independent hotel (at a 3-star

level)’, and being asked to list what they believe to be a high, medium and low

average room price per night according to the given situation (see Appendix 10).

Table 5: Pilot survey results of 20 Generation Y members.

Participant High room price/ night (Euro)

Medium room price/ night (Euro)

Low room price/ night (Euro)

Vali

1 80 60 30

2 100 65 45

3 80 45 20

4 300 150 70

25

d 5 80 50 30

6 130 80 60

7 160 80 40

8 100 75 50

9 300 200 100

10 100 70 55

11 70 50 30

12 160 120 100

13 250 190 120

14 120 70 30

15 200 80 45

16 140 85 40

17 155 100 50

18 100 60 45

19 120 70 55

20 125 75 70

Average 143,5 88,75 54,25

The results of this pilot survey are listed in Table 5, and the individual averages of

the high, medium and low room price per night are calculated at the bottom of the

table. In order to simplify the experiment, these averages were rounded to an

integer:

High room price / night: 145 Euro

Medium room price/ night: 90 Euro

Low room price/ night: 55 Euro

3.2 Experimental Design

The online survey conducted, consists of three main sections. The first section

displays a total of six different hypothetical scenarios, where each participant is

presented with one scenario only (to view a sample scenario, see Appendix 1). After

being given their scenario, the participants are asked to indicate the maximum

amount of money that they would pay for staying at a hotel for one night (see

Appendix 2).

The second section consists of presenting all participants with the same screenshot

of tripadvisor.com of a hotel’s information (see Appendix 3). The hotel ‘Adelaide

Rockford’ in Australia was chosen at random since the likelihood of one of the

26

participants having been there or knowing of it is very low. The participants were

then asked how likely they would consider this hotel based on the previously viewed

screenshot (7= very likely, 1= very unlikely) and what the maximum amount that

they would pay for a night at this hotel would be (see Appendix 4). The next step

consisted of presenting the participants with a maximum of 20 real user generated

reviews, which were extracted from tripadvisor.com (see Appendix 5). After viewing

the first review, respondents had the option (A) of either clicking on a button, which

took them to the next review, or option (B), which consisted of a second button,

which said ‘I have seen enough reviews’. If participants chose (A), they were taken to

another review and so on, whereas participants who chose (B) were taken to

another set of questions. They were asked to answer four questions: How likely they

are going to consider this particular hotel on a scale of 7= very unlikely and 1= very

likely, what the maximum amount they would pay for a night at this hotel would be,

how likely they would reserve a room at this hotel via tripadvisor.com and how likely

they would reserve a room at this hotel using another channel, all based on the

same scale mentioned above: 7= very unlikely, 1= very likely (see Appendix 6).

Next, respondents were asked to complete a manipulation check by answering three

questions about the previously presented scenario. They were asked whether they

were travelling alone or with a friend (based on the information they received in the

scenario they received at the beginning of the survey), whether the reference price

per room per night shown was categorized as a low, medium or high price level as

well as how many stars the hotel has that they are looking to book (see Appendix 7).

Finally, the participants were asked to state their gender, nationality, how often they

read reviews online (rating this on a scale of never, sometimes, often and always)

and how often they book using an online platform like tripadvisor.com (rating this

on a scale of never, sometimes, often and always - see Appendix 8).

3.3 Data Collection

As there are three different price levels (high, medium, low), two different travel

party sizes (big, small), and 30 respondents are required per scenario, a total of 180

respondents are needed in order to collect enough data for each of the variables.

The target respondents for the survey experiment were Generation Y travelers. They

27

were selected using the convenience sampling method (by approaching social

circles). In order to ensure participants were qualified to take the survey (i.e. are

part of Generation Y) they were required to tick a box at the beginning of the survey

stating that they are (a) between the age of 21 and 37 or (b) not between the age of

21 and 37 (see Appendix 11)

The survey was distributed to target respondents via an online link. They were

messaged individually on Facebook, were given the link and were asked to fill in the

questions. In total, 149 responses were received.

3.4 Data Analysis

The descriptive analysis was used to find out the demographic profile of the

Generation Y travelers, who took part in the online survey. Only surveys where all

questions were filled out completely and with consent were included in the analysis.

Overall a total of 132 valid responses were received from the online survey. With

this in mind, the following four demographic related questions were asked at the

end of the survey (also stated in 3.1):

Gender

Nationality

Frequency of booking a hotel online

Frequency of reading reviews online

In order to better understand the main/interactive impact the two-way ANOVA test

was used to test the three dependent variables- the likeliness of choosing the hotel,

the price and the number of reviews read. The results state the individual/ main

impact of travel mode and price, as well as the collective/ interactive impact.

28

4 Research findings

4.1 Demographic profile

4.1.1 Gender

Table 6 shows that 32.6% (n = 43) of the 132 valid survey respondents are male and

67.4% (n = 89) of all respondents are female.

Table 6: Gender of survey participants.

Frequency Percent Valid Percent

Male 43 32.6 32.6

Female 89 67.4 67.4

Total 132 100.0 100.0

4.1.2 Nationality

Overall 22 different nationalities participated in the survey, 54.5% (n = 72) of them

being Austrian. Also amongst the countries with the most participants were

Germany (n = 11, 8.3%), Spain (n = 7, 5.3%) and the United Kingdom (n = 10, 7.6%).

Table 7: Nationality of valid survey respondents.

Frequency Percent

Austria 72 54.5

Germany 11 8.3

The United Kingdom 10 7.6

Spain 7 5.3

Mexico 4 3.0

Japan 3 2.3

Greece 2 1.5

Hong Kong 2 1.5

Croatia 2 1.5

Italy 2 1.6

29

Poland 2 1.5

Ukraine 2 1.5

Slovenia 2 1.5

Slovakia 2 1.5

Norway 1 .8

Korea 1 .8

The United States 1 .8

Sweden 1 .8

Thailand 1 .8

Korea 1 .8

Hungary 1 .8

Bosnia 1 .8

Total 132 100.0

4.1.3 Frequency of booking a hotel online

From the results obtained in Table 8 it can be seen that 34.1% (n = 45) of all survey

participants often book a hotel online whereas 2.3% (n = 3) never book a hotel

online. The amount of people sometimes booking a hotel online and always booking

a hotel online is the same, which is 31.8% (n = 42).

Table 8: The frequency of valid survey respondents booking a hotel online.

Frequency Percent

Never 3 2.3

Sometimes 42 31.8

Often 45 34.1

Always 42 31.8

Total 132 100.0

30

4.1.4 Frequency of reading reviews online

Concerning the frequency of reading online reviews, the table below shows that

45.5% (n = 60) of respondents always read reviews online, 29.5% (n = 39) often read

reviews online and only 4.5% (n = 6) never read reviews online. This highlights the

importance of reading online reviews to the participants.

Table 9: The frequency of survey respondents reading reviews online.

Frequency Percent

Never 6 4.5

Sometimes 27 20.5

Often 39 29.5

Always 60 45.5

Total 132 100.0

4.2 Likeliness

4.2.1 Likeliness of booking the hotel after reading the scenario, hotel

profile and the reviews

The two-way ANOVA results show that travel mode and reference room price are

not key factors affecting one’s likeliness to stay in the reviewed hotel because the

significance values are larger than 0.05 (Price: 0.202; Mode: 7.87; Collective impact

of the two variables: 0.355).

Table 10: Likeliness of booking the hotel after reading the scenario, hotel profile and the reviews.

Source Type III Sum of Squares

df Mean Square

F Sig.

Corrected Model

8.239a 5 1.648 1.084 .372

Intercept 3842.504 1 3842.504 2528.480 .000

SCENE_Price 4.924 2 2.462 1.620 .202

SCENE_Mode .111 1 .111 .073 .787

SCENE_Price * SCENE_Mode

3.171 2 1.585 1.043 .355

Error 191.481 126 1.520

Total 4051.000 132

Corrected Total 199.720 131

31

The mean total values of low-priced, mid-priced and high-priced are very similar

(low-priced: 5.53, mid-priced: 5.13, high-priced: 5.55), which is why the test

indicated that price and travel mode are not a significant factors affecting how

people rate the likeliness of staying at the hotel after having read the reviews.

Table 11: Descriptive statistics for the likeliness of booking the hotel after reading the scenario, hotel profile and the reviews.

Reference price Travel model Mean SD N

Low-priced Travel alone 5.43 1.121 23

Travel with friends 5.64 1.002 22

Total 5.53 1.057 45

Mid-priced Travel alone 4.95 1.527 22


Total 5.13 1.590 45

High-priced Travel alone 5.73 .703 22


Total 5.55 .916 42

Total Travel alone 5.37 1.191 67


Total 5.40 1.235 132

4.2.2 Likeliness of booking the hotel via Trip Advisor after reading the

scenario, hotel profile and the reviews

Regarding the impact of the manipulated variables on respondents’ likeliness of

booking the hotel via tripadvisor.com, alike the findings in 4.2.1, the significance

values of the two-way ANOVA test (including the main impact of price, the main

impact of travel mode and the interactive impact of the two) are insignificant as

their values are above 0.05, as shown in Table 12 below. This means that price and

travel mode have no impact on the likeliness of booking the hotel via

tripadvisor.com, after having read numerous reviews about it.

Table 12: Likeliness of the survey participants booking the hotel via Trip Advisor after reading the scenario, hotel profile and the reviews.


df Mean Square

F Sig.

Corrected Model 16.067a 5 3.213 1.188 .319

Intercept 2975.665 1 2975.665 1100.534 .000

SCENE_Price 11.690 2 5.845 2.162 .119

SCENE_Mode .240 1 .240 .089 .766

32


3.866 2 1.933 .715 .491

Error 340.683 126 2.704

Total 3335.000 132


The descriptive statistics in Table 13 below show that although the results of the test

were insignificant. The majority of participants answered the question of whether

they would book the hotel through Trip Advisor, after having read the reviews with

“undecided”. Participants had a choice of 7 different answers (very likely, likely,

somewhat likely, undecided, somewhat unlikely, unlikely and very unlikely), where

unlikely was placed fourth. When looking at the total mean for the low-priced hotel

accommodation, which is 4.40 and for the mid-priced 4.73 it can be seen that most

participants tend to choose a positive rating (rating towards 7) rather than choosing

a more negative rating (towards 1), which may be an explanation to why the mean

score of 4 was chosen. The mean of the high-priced hotel is 5.14 meaning most

participants chose the answer “somewhat unlikely”. A reason for this could be that

the scenario did not necessarily help them to decide whether they would like to stay

at this hotel or not.

Table 13: Descriptive statistics for the likeliness of the survey participants booking the hotel via Trip Advisor after reading the scenario, hotel profile and the reviews.




Total 4.40 1.802 45



Total 4.73 1.789 45

High-priced Travel alone 5.36 1.002 22


Total 5.14 1.221 42



Total 4.75 1.650 132

33

4.2.3 Likeliness of booking the hotel via a different booking platform after

reading the scenario, hotel profile and the reviews

The results of the testing of whether survey respondents are likely to book the given

hotel via a different platform have shown to be insignificant. Both price and travel

mode have a significant value higher than 0.05. With a value of 0.815, the interactive

impact of both price and travel mode is also insignificant.

Table 14: Likeliness of survey participants booking the hotel via a different platform after reading the scenario, hotel profile and the reviews.


df Mean Square

F Sig.

Corrected Model

13.399a 5 2.680 1.430 .218

Intercept 3122.522 1 3122.522 1666.074 .000

SCENE_Price 9.010 2 4.505 2.404 .095

SCENE_Mode 3.927 1 3.927 2.095 .150


.767 2 .384 .205 .815

Error 236.147 126 1.874

Total 3372.000 132


As during previous tests, the results of the descriptive statistics of the likeliness of

booking the given hotel via a different booking platform are also leaning more

towards the negative side. With a mean value of 4.53 for the mid-priced hotel room,

and a value of 4.90 for the high-priced hotel room, it can be seen that again

participants chose the answer “4. Undecided”. Concerning the low-priced hotel

room, most respondents answered the question with “5. Somewhat unlikely”.

Table 15: Descriptive statistics of the likeliness of survey participants booking the hotel via a different platform after reading the scenario, hotel profile and reviews.




Total 5.16 1.364 45



Total 4.53 1.392 45


34

Travel with friends 5.20 .894 20

Total 4.90 1.340 42



Total 4.86 1.380 132

4.2.4 Likeliness to stay (after reading the scenario) vs. likeliness to stay

(after reading the reviews)

Table 16 shows a mean of 4.55 (n = 132) for the likeliness of staying at the hotel

after having read the scenario, and a mean of 5.40 (n =132) for the likeliness of

staying at the hotel after having read the reviews. Due to this it can be concluded

that participants are more likely to choose the hotel after being exposed to

consumer generated reviews. In other words, they are more likely to choose the

hotel after having read the reviews than after having read just the scenario.

Table 16: Paired sample statics of the likeliness to stay (after reading the scenario) vs. the likeliness to stay (after reading the reviews).

Mean N Std. Deviation

Std. Error

Mean

Pair 1 After reading scenario -

Likeliness

4.55 132 1.520 .132

After reading reviews -

Likeliness to stay in this

hotel

5.40 132 1.235 .107

The paired samples test listed in Table 17 shows that the significant 2- tailed value of

the test is lower than 0.05 with a value of 0.000. This again denotes, that the

respondents are more likely to choose the given hotel after being exposed to the

consumer generated review. The negative correlation coefficient of -0.658 shows

that there is a strong negative correlation.

35

Table 17: Paired samples test of the likeliness to stay (after reading the scenario) vs. the likeliness to stay (after reading the reviews).

Paired

Differences

t df Sig. (2-tailed)

95% Confidence

Interval of the

Difference

Upper


Likeliness - After reading

reviews - Likeliness to stay in

this hotel

-.658 -8.794 131 .000

4.3 Price

4.3.1 Price after reading the scenario

The results show that after having read the scenario, price and travel mode have a

significant impact due to a significant value of 0.000. A possible explanation for the

significance in travel mode could be, that when people travel alone, they like to treat

themselves better and therefore are willing to spend more money on their

accommodation when compared to travelling with friends. On the other hand, when

people do not have enough experience in making certain decisions, they tend to

trust the information they are given/ provided with and follow the norm. Therefore,

when the high-level reference price was shown in the survey, participants were

more willing to pay a higher price. In contrast, when a low-level price was shown,

they were more likely to rate the reference room price lower.

36

Table 18: Price the survey participants would pay per night per room after reading the scenario.


df Mean Square F Sig.


Intercept 908573.489 1 908573.489 1716.519 .000

SCENE_Price 26714.449 2 13357.225 25.235 .000

SCENE_Mode 17073.321 1 17073.321 32.256 .000


860.573 2 430.286 .813 .446

Error 66693.278 126 529.312

Total 1020009.000 132


The descriptive statistics table (Table 19) shows that, overall an average of 94.18

Euros (meaning the price they would pay for the hotel) were indicated by

participants travelling alone after reading the scenario and a total of 71.40 Euros

(meaning the price they would pay for the hotel) by participants travelling with

friends. These results go hand in hand with the results mentioned underneath the

previous table- people who are travelling alone, are willing to spend more money

compared to when they are travelling in a group.

Table 19: Descriptive statistics of the price the survey participants would pay per night per room after reading the scenario.




Total 64.04 22.700 45



Total 87.53 21.506 45



Total 98.33 31.815 42



Total 82.96 29.173 132

37

4.3.2 Price after reading the hotel profile

The results show that price (having a significant value of 0.000) and travel mode

(also with a significant value of 0.000) are both crucial factors for survey

respondents when it comes to booking a hotel accommodation. The interactive

impact on the other hand, is insignificant with a value of 0.708. A possible

explanation for this could be that customers only draw a final conclusion about the

hotel after having viewed the profile. The initial information, pictures and

comments, which are displayed on the profile, allow customers to decide whether

and if, how much, they would like to pay for a room at the given hotel.

Table 20: Price the survey participants would pay per night per room after reading the hotel profile.


df Mean Square F Sig.


Intercept 1022295.583 1 1022295.583 1312.795 .000

SCENE_Price 20862.960 2 10431.480 13.396 .000

SCENE_Mode 10352.805 1 10352.805 13.295 .000


539.832 2 269.916 .347 .708

Error 98118.331 126 778.717

Total 1148490.000 132


The price level continues to be significant after having read the hotel profile. This

shows that the confidence level of the participant’s increases concerning the hotel

and the price they would pay for the hotel.

Table 21 shows that participants travelling alone would pay more after having read

the hotel profile. On average, these respondents would pay 96.73 Euros per night

per room, whereas participants travelling with friends would pay an average of

78.66 Euros.

38

Table 21: Descriptive statistics for the price the survey participants would pay per night per room after reading the hotel profile.




Total 72.49 29.708 45



Total 88.51 30.414 45



Total 103.55 26.883 42



Total 87.83 31.520 132

4.3.3 Price (after reading the scenario) vs. price (after reading the hotel

profile)

Table 22 shows a mean of 82.96 (n = 132) for the price after reading the scenario

and a mean of 87.83 (n = 132) for the price after reading the hotel profile. This

indicates that participants are willing to spend more money on the hotel after having

read the hotel profile. The hotel profile not only provides them with more

information than the scenario, but they are also able to see a picture of the hotel

(which may have great influence on some participants as well).

Table 22: Paired samples statistics for the price (after reading the scenario) vs. the price (after reading the hotel profile).


Std. Error

Mean


Price

82.96 132 29.173 2.539

After reading hotel profile

- Price

87.83 132 31.520 2.743

39

Table 23 shows the paired samples test for the price respondents would pay for the

hotel after reading the scenario, compared to the price they would pay after having

read the hotel profile. The significant 2-tailed value is 0.055 meaning the results are

significant and respondents would pay more for the hotel (per room per night) after

having read not only the scenario, but the hotel profile too.

Table 23: Paired samples test for the price (after reading the scenario) vs. the price (after reading the hotel profile).

Paired

Differences


95% Confidence

Interval of the

Difference

Upper


Price - After reading hotel

profile - Price

.107 -1.936 131 .055

4.3.4 Price (after reading the hotel profile) vs. price (after reading the

reviews)

When looking at Table 24, it can be seen that with mean values of 87.83 (n =132)

and 88.33 (n = 132), the price indicated by participants is only slightly lower after

having read the hotel profile when compared to the price indicated after having read

the reviews.

Table 24: Paired sample statistics for the price (after reading the hotel profile) vs. the price (after reading the reviews).


Std. Error

Mean

40

Pair 1 After reading hotel profile

- Price

87.83 132 31.520 2.743


Price

88.33 132 32.472 2.826

The paired samples test results listed in Table 25 are insignificant with a 2- tailed

significant value of 0.771. This shows that reading reviews after having read the

hotel profile does not have an effect on the price per night the survey participants

would pay for the hotel.

Table 25: Paired samples test for the price (after reading the hotel profile) vs. the price (after reading the reviews).

Paired

Differences


95% Confidence

Interval of the

Difference

Upper

Pair 1 After reading hotel profile -

Price - After reading reviews

- Price

2.895 -.291 131 .771

4.3.5 Price (after reading the scenario) vs. price (after reading the reviews)

The paired samples statistics (Table 26) shows a mean of 82.96 (n =132) for the price

after reading the scenario, and a mean of 88.33 (n =132) for the price after reading

reviews. Again, these results show that the more information the participants

receive about the hotel, the more money they are willing to spend as their

confidence concerning the hotel increases.

41

Table 26: Paired sample statics for the price (After reading the scenario) vs. the price (after reading the reviews).


Std. Error

Mean


Price

82.96 132 29.173 2.539


Price

88.33 132 32.472 2.826

With a 2- tailed significant value of 0.044, it can be seen that there is a statistically

significant difference between the price after reading the scenario when compared

to the price after reading the reviews.

Table 27: Paired samples test for the price (after reading the scenario) vs. the price (after reading the reviews).

Paired

Differences


95% Confidence

Interval of the

Difference

Upper


Price - After reading reviews

- Price

-.153 -2.036 131 .044

42

4.4 Number of Reviews

With a significance level of 0.005, the price level of the hotel per room per night has

an impact on the amount of reviews read. Travel mode on the other hand is

insignificant with a value of 0.591. Also, there is no collective impact between the

two variables, as the significance value of 0.905 is above 0.05.

Table 28: The number of reviews read per participant.


df Mean Square

F Sig.


Intercept 1921.780 1 1921.780 295.250 .000

SCENE_Price 70.808 2 35.404 5.439 .005

SCENE_Mode 1.885 1 1.885 .290 .591


1.297 2 .648 .100 .905

Error 820.133 126 6.509

Total 2841.000 132


The descriptive statistics show, that an average of 2.86 (n =42) reviews were read by

participants which received the high-priced scenario, followed by 3.96 (n = 45)

reviews which were read by participants of the low-priced scenario. The mid-priced

scenario participants read an average of 4.64 (n = 45) reviews, which is the highest

amount of reviews read out of all three price groups. This result is rather

unexpected. Logically, one would think that participants, who are spending the most

money, would read the most reviews.

Table 29: Descriptive statistics of the number of reviews read per participant.




Total 3.96 2.236 45



Total 4.64 3.241 45



Total 2.86 1.855 42


43


Total 3.84 2.612 132

44

5 Conclusion

5.1 Summary

This thesis aims at analyzing Generation Y travelers by investigating the impact of

travel mode and reference room price on their hotel consideration. From the

literature review it can be seen that Generation Y is a very complex generation with

many behavioral differences. Generation Y will soon become the largest

consumption group, which is why it is important to focus on their behavior.

Especially in the tourism sector, individualization and personalization of journeys

and experiences for example is becoming more and more important, so knowing as

much as possible about this upcoming generation will be very beneficial in the long

run.

Although the global generation overview (Ordun, 2015, p. 41) in Table 1 consists of

many definitions for Generation Y (depending on the country), for the purpose of

research and ease of understanding this thesis, Generation Y is given one definition

only. Generation Y is not defined broadly as done by the Business Dictionary (2016),

but is defined as those born between 1979 and 1995, meaning those aged between

21 and 37 at this point in time.

When compared to other previous generations, generational differences can be

seen. Differences in characteristics for example can also be seen within Generation Y

itself depending on which country the person is from. There is still a lot left to learn

about Generation Y and there are many things yet still to be discovered. For

example, as the oldest members of Generation Y are currently only in their thirties,

the generation can only be analyzed up to this point. Behaviors of elderly Generation

Y’s, pension patterns as well as family predictions are not very accurate at this point

in time.

Analyzing some of Generation Y’s behavior and habits is difficult, which is maybe

why there is not as much literature when compared to the literature, which

investigates the behavior of previous generations. However, what can be said about

this generation is that they are more technologically advanced than any other

generation has ever been before, keen to learn and not shy to delegate others.

45

The literature review of this thesis focused on 4 main factors influencing hotel

consumers’ consideration (Travel Mode, Travel Party Size, Holiday Type and Price of

Journey/ Accommodation/ Ease of Booking). With the help of an online survey, the

researcher was able to find out whether travel mode and reference room price have

any influence on Generation Y travelers’ hotel consideration. In total 132 valid

responses were received (32.6% male, 67.8% female) which showed the following

trends.

Growing up next to the current development of technology has made this

Generation dependent on ICT’s such as the Internet. Information transparency and

reading reviews about previous experiences has become an important aspect for

Generation Y which can be seen as 45.5% of survey participants, always read

customer reviews. 34.1% of these participants then go on to booking a hotel online.

In the present study, it was found that both price and travel mode are crucial factors

for survey respondents when it comes to their hotel consideration/ booking a hotel

accommodation. This can be seen by the highly significant results (sig= 0.000). With

a significance value of 0.798, the interactive impact of these two variables has

however proven to be non- significant. Concerning the number of reviews read per

respondent before considering the hotel, it was found that the price (with a

significance level of 0.005) has an impact on the amount of reviews read. Travel

mode on the other hand was again non- significant with a value of 0.591. The

descriptive statistics show that the most reviews (on average 4.64 per person) were

read by participants, who received a mid- price scenario, and in fact participants

who received a high- price scenario read the least amount of reviews (on average

2.86 per person), which was rather unexpected. The more information the traveler

receives about the hotel, the more money he/she is willing to spend on the hotel per

room per night, as a result of a confidence increase concerning the given hotel.

5.2 Limitations

The survey experiment conducted in the current study has two main limitations.

Only 132 valid survey responses were received, which is lower than the number of

46

valid responses required for this experiment. Due to this, some of the tests are

insignificant. With the small amount of valid responses received, it is difficult to

generalize the result to the whole Generation Y (consisting of 1.8 billion members

(IPK International, 2016)). In order to improve this in the future, it is necessary not

only to extend the amount of respondents, but also to diversify their cultural mix

(now most are from Austria and other parts of Europe).

The survey was conducted in the online space meaning the participants can’t be

monitored whether they the questions carefully, and answer them truthfully.

However if the survey would be conducted in a laboratory or natural setting (OTA)

the results could be very different.

5.3 Recommendations

This study shows, that travel mode and reference room price are significant factors

influencing booking behavior of Generation Y, however act independent of each

other.

As this experiment has a small sample size of 132 participants, the results can be

understood as a trend. In order to be able to generalize these findings, they should

be confirmed in a study using an expanded sample size.

As previously mentioned, most of the surveys were answered by those living in

European countries. It would be preferable to include more nationalities from other

continents in order to be able to properly generalize the results to all the people of

Generation Y.

67.8% of the valid survey respondents were female. This could have caused the

results to be biased. In order to avoid this when conducting experiments in the

future, it would be of importance that the amount of valid responses are equally

split between male and female survey participants.

The scenario at the beginning of the survey states that participants should imagine

themselves planning a trip to Adelaide, Australia. This is quite a remote city to most

of the target respondents. Therefore, if the city was changed to a closer (perhaps

even European) one, the results may be different, as participants are more able to

relate to the scenario given. It would also be advisable to create different scenarios

47

using hotels in different geographical regions in order to investigate the difference

between intercontinental, continental and regional hotel consideration.

48

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7 Appendices

Appendix 1

Appendix 2

Appendix 3

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Appendix 4

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Appendix 5

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Appendix 6

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Appendix 7

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Appendix 8

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Appendix 9

Survey Part I:

Imagine that you are planning to take a trip to Adelaide (Australia) to celebrate Easter in the coming April 2017.

If you were to book a room in an independent hotel (at the 3-star level), in your opinion:

- A high room price (per night) is : EUR _______

- A medium room price (per night) is : EUR _______

- A low room price (per night) is : EUR _______

Appendix 11

generation y travelers’ hotel · (sheahan, 2005), ^ause-related marketing: how generation y...

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